MONTPELIER— In an unusually speedy process, the state on Monday granted itself a certificate of need — essentially a state permit — for a new public psychiatric hospital in Berlin to replace the Waterbury facility that was closed by flooding from the remnants of Hurricane Irene.

Just three days after a public hearing to air the merits of the proposal, the Department of Mental Health’s plan for a 25-bed hospital near the Central Vermont Medical Center won approval from the Department of Financial Regulation. Officials hope to have it open by January 2014.

DFR Commissioner Steve Kimbell noted Vermont has been scrambling since Irene hit in late August 2011 to find places for its mental health patients. By last winter, a plan gelled and won legislative approval to have the 54-bed Vermont State Hospital in Waterbury replaced by the smaller hospital in Berlin, along with a series of still smaller psychiatric units around the state in Brattleboro, Morrisville, Rutland, Burlington and elsewhere.

While that plan has been in the works, officials have struggled to find adequate placements for patients who would have gone to Waterbury. Some have languished for days under police guard in the emergency rooms of community hospitals, waiting for an inpatient bed to open up.

“This has put tremendous pressure on the state’s ability to care for Vermonters will serious mental illness,” Kimbell said in a statement announcing his approval of the certificate of need. “Our mental health care providers are to be commended for their hard work and dedicated service during this difficult time.”

The head of an advocacy group called Monday’s announcement “great news.” Floyd Nease, executive director of the Vermont Association for Mental Health, said the Berlin facility would be “the anchor for the new system that we’re building. Rather than months and months worrying about achieving a (certificate of need), they’ve managed to do it in very short order.”

Rep. Anne Donahue of Northfield, the top Republican on the House Human Services Committee who closely follows mental health issues, also called the announcement good news. The new hospital will have “excellent outdoor space,” as well as state-of-the-art treatment areas, a vast improvement over the Waterbury hospital.

The Waterbury hospital was first opened in the 1890s and was widely viewed as antiquated and in need of replacement. The new hospital will be “no comparison to Waterbury,” Donahue said.